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tv   Street Signs  CNBC  December 1, 2009 2:00pm-3:00pm EST

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good afternoon to you. i'm simon hobbs in for erin burnett. here is your "street signs" road map. president obama shifting strategy in afghanistan. who will pay for the surges costs and will it cost obama his global position? thenbc com cost deal jumps another hurdle. and can manufacturer's deals smatter a a bottom line. we begin with a triple digit rally in the market and a high for the year on gold, materials, and energy on the stock market. today's best performing group, bullion crossing the $1,200 level. financials are the only sector appearing to be falling so far. brian shactman is at the nasdaq and bertha is at the nyse.
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>> we started today really with the dollar at weak point and that set off the commodities. also the relief over the dubai situation, a lit of a relief rally. we saw asia higher, europe higher, and that set us up. the materials have outperformed all day. we have had a number of new highs including dupont. barron gold among the latest gold miners saying they are lifting their hedges. that's also part of what's been fueling that move to the upside when it comes to gold futures. i'm not sure if we have the chart to look at that. industrials today also pretty strong as well. 3m, deere at new highs, wells fargo lifting the sector saying they do see earnings there starting to turn the corner going into next year. as simon mentioned, the big banks have been the big decliners. jpmorgan the biggest loser on the dow jowl day. out with a call saying a lot of banks in the u.s. have been hoarding cash, and they don't
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see things turning around for them. the hmos continue to outperform. they're up 27% in november, and today a number of them, including wellcare at new highs. brian shactman is over at the nasdaq and technology very strong today as well. >> the nasdaq outperforming both the s&p 500 and the dow jens industrial average. we're up 1.8%. a slew of stories. the first leg of this nasdaq rally a lot of it has to do with altera. the whole chip sector is gangbusters outperforming more than 2% across the board. staples good earnings in the top and bottom line. most importantly they said holiday season going well off to a good start up 6%. google touched another 52-week high before pulling back a little bit right and the 590 mark. microsoft 7 cents shy of that key $30 level. cisco up 2.4%. you talk about what the dollar and the commodities are doing. bucyrus, a mining equipment giant, up.
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hand sets are all up, the makers of them. palm the strongest per former o the entire bunch. there's a rumor the obama administration might do subsidizing in home improvement. sears is up with a $2.57 sent pop. a call to raise rates sooner rather than later from a top american central banker. this on top of a positive report on the manufacturing sector this morning setting up the debate for the markets on the all-important employment report that we'll get at the end of the week and in front of that on thursday. a question of monetary policy both here and in europe. senior economics reporter steve liesman joins us. >> thank you very much. we'll get to the comments in a second but let's concentrate for a moment on the positive news on the jobs front in the form of the ism manufacturing report. the sector overall growing for the fourth straight month.
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still suggests growth in the economy and in the manufacturing sector. the report's employment index also showed continued expansion for the second straight month down a bit from the prior month, but still just above the 50 expansion level. here are a few other indicators we're watching this week. initial claims, that's thursday, adp jobs, that's the private sector forecast of the private sector jobs. minus 150,000. that would be the best since mid '08. credit suisse pointing to improving unemployment claims, favorable seasonal adjustments, increase in employment and better manufacturing data we just pointed to. the fed will need to raise interest rate before
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unemployment reaches acceptable levels or it risks high inflation and a loss of credibility. he based his comments on long standing criticism the output gap theory or the amount of slack in the economy as a way to gauge inflation. he's contradicting ben bernanke. he says the data not very good gauges of the way inflation is heading. >> how significant is his intervention today? >> i think it's part of the discussion that goes out. i wouldn't put him in the center of where the fed is right now. i think he speaks for a small number on the board, maybe three or four members, and they are very concerned about inflation bus mostly they don't buy this output gap theory which says that high unemployment and low capacity utilization guarantee low inflation. he says it's not a good gauge of inflation. >> if credit suisse was right and on friday we got no gain to the unemployment, if it actually came through at zero, then that
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would be a green light to start to raise rates, wouldn't it? >> the jobs numbers and especially the unemployment numbers will -- could change the calculus in a heartbeat. the fed has this comment, simon, that they're going to be ex sechin septiex eptionally low for an extended period. >> i didn't mean to interrupt you. >> i was going to say there are interesting questions about the extent to which u.s. and europe coordinate their policies. >> that's exactly where i was heading. we have had a conversation whereby -- >> and neither one is marked in the face as a result of that discussion. >> my name isn't santelli. >> the european central bank being much more gradualist might have indicated that it's thinking about actually -- >> yeah. >> it might set a different stage for the bernanke cross-examination on capitol hill thursday morning. >> i don't think the ecb and the fed are all that different. it strikes me there are hawks on
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the ecb that are talking their game just as surely as hawks on the fed are talking their game. the question is where the center is. i would argue the center in europe is a little bit further towards hawkishness than it is right now in the united states. >> absolutely because of the history. absolutely, no question. no gross mandates. >> the trouble the ecb has is if they're further ahead of the united states, that will strengthen the euro and we know that's becoming a bigger and bigger problem in europe. >> the fact you're going to be one of the last to tighten means you have a big problem with the dollar. >> exactly, but whose problem is it? europe's problem or our problem? europe is the one with whatever percentage it is, large percentage of the economy geared towards exports that stands to suffer i think more than the u.s. does. >> well, it will be your dollar crisis. they will revert to type, won't they? >> i think it's going to be everybody's dollar crisis. >> okay. thank you very much. steve liesman there. now joined by the former labor
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secretary robert reich and joel narroff joins me. i understand reading the notes that you two disagree in advance of thursday's job summit with mr. obama, president obama, about the need and the effect that further government spending could have. let me kick off with you if i may, what's your view of what's needed? >> well, i don't think at this point we need a whole lot. clearly, the job market isn't in great shape, and it's not going to be coming back at any rapid pace at all. we may be getting to the end of the job losses but the job gains are going to be weak, but i don't think really we're at a point where we need a huge government incentive. we need to start turning this over to the private sector because an established growth pattern needs to come from the private sector and that's why we need to get going right now. >> secretary reich, what is your view? we're two-thirds of the way through the jobs stimulus as we
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have it? >> simon, we have gone through a lot of the stimulus already, but a lot of the stimulus package remains to be spent. i agree with your other guest, we probably don't knee a gigantic jobs package, but we certainly do need some more stimulus. i expect there will be a lot of popularity on capitol hill, maybe on oath sides of the aisle for a new jobs tax credit for maybe an exemption, a tax holiday on the first $20,000 of payroll tax hs that goes both to the employer and to the employees. i would say a lot of receptivity on the hill and the administration to get credit more easily and cheaply to small businesses because small businesses are the engine to job growth and they have a hard time getting credit. >> on this occasion let's skate over what the effects of that would be on the debt and the budget deficit. mr. naroff, do you think it would actually work? >> i think it would work but not a whole lot to tell you the truth. i mean, at this particular point
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businesses are looking out in the future and asking themselves this question, what's this recovery going to look like, and do i really need this additional worker? and maybe for those people that would have considered or those businesses who considered just simply going overtime, hiring an additional worker, that might work on the end, but you have to keep in mind every time you create that incentive, every business gets it whether or not they were going to be creating new jobs and it becomes extraordinarily expensive to do that. >> robert, i don't know if you knew d.j. greenstone-miller when you were in the clinton administration, and she was bill clinton's former special assistant. in today's "wall street journal" she has an op-ed in which she argues that the raising temporary worker is not a bad thing. she is suggesting actually that if there is a job tax subsidy, it should specifically apply also to temporary workers and she thinks the rules should be changed so people can --
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employers can take on people without fear that the irs will attempt to reclassify them further on down the line. what do you think of this argument on the quality of the jobs we create? >> it's not a bad argument. what worries me honestly, simon, is that this jobs recession that we are in is going to continue for quite some time. i wouldn't be surprised if unemployment reached 11% or 12% over the next 12 months and that also hides within it a great deal of underemployment, as you know. that in turn spells kind of a problem on the demand side. there's just not enough aggregate demand because consumers are reluctant to spend. so i would do everything in my power, even if that meant in the short term increasing the deficit for the sake of getting people jobs and getting the economy back on track. >> joe, a last word from you, if i may. >> i think as mr. reich said the key is on the demand side. hiring more workers is not the key. the key is getting people comfortable enough to start spending again, getting businesses to look towards the
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future and start saying, you know something? i really do need to invest a little more. it's the confidence side and the demand side, not the supply side. >> joel -- >> i agree completely, but workers and consumers are the same people, and consumers are not going to spend unless they have jobs and unless they worry less about losing their jobs. >> right, but the workers who have jobs are not spending and those are the people that can drive the economy forward. >> we have to leave it there. >> they're not spending in large part because they're worried about keeping their jobs and wages and real benefits are decreasing very, very quickly. i think just one final thing, simon, i know you want to close, but you're absolutely right and your guest is right, we've got to look at not only the jobs situation, but also the wages situation because they're absolutely locked together. >> thank you both. up next on "street signs," as the nbc/comcast deal jumps another hurdle, we have heard a special report on the lessons to be learned from the ghosts of media mergers past.
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surging troops, surging costs. it will cost the state an estimated $1 million per year per extra soldier sent to afghanistan. a closer look how we will pay for obama's strategy. plus, a preview of what could be the president's most important speech to date live from west point. you're watching cnbc, first in business worldwide. pothole:h no...your tire's all flat and junk. oh, did i do that? here, let me get my cellular out - call ya a wrecker. ...oh shoot...i got no phone ...cuz i'm a, bye! anncr: accidents are bad. anncr: but geico's good. with emergency road service. ding!
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big news today. general electric, parents company of this network, agreeing to buy vivendi's 20% stake in nbc universal for $5.8 billion. tentative agreement at this stage, but still a major hurdle towards another deal to give comcast majority control over nbc universal. for the latest talk on the massive regulatory and political hearings that will be held during the course of the next year, we cross live to washington and to cnbc's hampton pearson. do we think it's going to be a rough gamut for them to run? >> it will be a long one. here in washington today on cnbc we've had ge ceo jeff immelt and the head of the fcc, julius genachowski, both do their best not to talk about the next media mega deal. with the hurtle cleared it now seems only a matter of time as to when we get an actual
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announcement of ge's intention to turn over control of nbc to comcast. >> you always have to be thinking about what's next in every industry and stay strategically agile. we have been in the media business. i like my team and i am comfortable with it, but i think complacency equal it's arrogance in a company setting. i never wanted to be complacent about how we think about ge, and i'm not going to be that way today. jo a >> and from the chairman of the fcc a polite but firm stone wall. >> it won't surprise you to hear i can't comment on that. we have nothing before you at the fcc and there's nothing to comment on. >> but what will end up before regulators is a comcast/nbc merger that combines the largest cable tv operator and second largest internet service provider with nbc which owns broadcast and cable networks and
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movie studio. a power house. look for competitors to cry foul and consumer groups to predict skyrocketing cable rates if the merger is allowed to happen. now, the regulatory landscape looks like this. the key players will be the fcc and either the justice department or the federal trade commission evaluating antitrust and competition issues. that process could last about a year. at the end of the day it's all about what conditions are negotiated on the way to what is expected to be eventual approval. simon? >> great. hampton thank you for that. hampton pearson with a brief in washington. of course, it's been a long hit of big media mergers but is there a long track record of success as well? mary thompson is here with that perspecti perspective. >> the simple answer to that question is no. media is littered with big deals promising savings, analyst david banks says the truth of the matter is media deals rarely deliver on those promises. >> the reality is there have
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been very few that really have definitively created value. >> analyst david joyce says a primary reason they don't create value is the two sides rarely succeed in blending their cultures. >> it's a tough thing to figure out on paper whenever you're trying to put together two companies' numbers. >> since 1998 deal logic says there have been 3,743 deals totaling $786 billion in the tv, radio, newspaper, and internet industries. two of the biggest are considered two of the biggest failures in that space. when aol ak choacquired time warner. a nine-year effort to make good on that promise ending this month when time warner spins off aol. >> there's a lot of different silos of people working together, defending their business unit and there was no
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forced working together of the different units and that's ultimately why aol and time warner merger did not work. >> analysts say another big veil you're, viacom's 1999 purchase of cbs which it spun off seven years later. still not all deals are bad. industry experts rank disney's acquisition of pixar among the best along with its acquisition of abc. >> it put them into broadcast, lifted them out of the realm of being a theme park and film production studio into a multimedia conglomerate. >> as for the pending nbc/comcast deal, they say it's too soon to tell. combining assets at a time when a number of players in the industry are still trying to figure out what exactly is in the industry's future are a couple of the stumbling blocks they will face. >> at least this one we can watch at firsthand. >> that's true. we'll be able to actually -- >> or not as the case may be depending what the new world brin brings. mary, thank you for that. a round up of what we've seen in the media sector.
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just ahead, the president is now over five hours away from that critical speech on afghanistan. 8:00 eastern live on wall the networks, but as strategies shift, it's not the only thing on the line tonight. we'll break down the decision and speech to send more troops. "street signs" is back after the break.
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president obama is hours away from laying out his new mission for afghanistan. with $60 billion already budgeted to fight the taliban next year, exactly how much will he expected troop surge cost the american taxpayer? we have every angle of the story covered. john harwood is learning more about the president's speech in washington. first we go to scott cohn at west point. let's kick off with you, scott. >> reporter: all right, simon. of course, a very important symbolic place for the president to make this speech, and you can tell when it's an important presidential speech when there are so many different audiences that he has to speak to. of course, the american people
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who will watch this on television tonight, american allies, the people of afghanistan and pakistan, but perhaps no one more important than the u.s. military, and that's why he's come here to the oldest service academy to lay out his strategy for afghanistan and also pick up on a tradition that goes way back with presidents speaking here, but usually under much different circumstances. the last presidential speech here, of course, in 2002 at the height of george w. bush's popularity, june of 2002, a commencement speech here at west point. the war in iraq was still on the horizon. it seemed as though the war in afghanistan had been won. in fact, he said to the graduates that the war was begun well, the war on terrorism, and also famously laying out the bush doctrine of preemption. we cannot defend america and our friends by hoping for the best, he said, adding if we wait for threats to fully materialize, we will have waited too long. so much has happened since then, and this occasion will be much
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more solemn than that. president obama will speak in an auditorium. the eisenhower auditorium. there won't be cadets behind him. they will be in the awedancudia. he'll lay out a war that's much more complicated than it seemed as it started in the wake of 9/11. we're learning more about the details of what will be in the strategy. for that chief washington correspondent john harwood joins us. >> reporter: for all those audiences that scott cohn just mentioned, this is an incredibly speech in the young presidency of barack obama because after eight years this is when barack obama takes possession of the afghanistan war, the war that he said was the right war to fight while he was criticizing president bush and accusing him of mismanaging the wrong war, which he thought was the iraq conflict. now, here are the elements of the new strategy as we understand them from white house officials. first, a commitment of another 30,000 troops, not as many as the 40,000 that general stanley mcchrystal requested, but still
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a more than doubling once these troops are added of the initial commitment that president obama inherited. second of all, a rapid deployment to try to provide accelerated support for both national and local afghan officials to try to build up their armed services and fight within the community the taliban. and finally, a time limited commitment he wants to communicate both to his own party and the public at large that we're not in there indefinitely after eight years because this is a very costly war and one that some members of his party, simon, are opposed to, and he's going to have to persuade them to fund this conflict. >> obviously, we'll cover that live tonight as indeed will many of the networks at 8:00 eastern, and i know you will take a major part in that with the analysis immediately -- during and immediately afterwards. thank you very much, the view from washington. let's get to more perspective on tonight's speech and the afghanistan strategy from both at home with jack jacobs, who is
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an msnbc military analyst a colonel, and from london where rosemary hollis joins me from the city university of london, a long time commentator on specifically the middle east but foreign affairs more broadly. let at the kick off with you, colonel, if i may, how do we ensure this is not becoming a historic mistake, another vietnam? you know they are going to be able to repel the taliban, that they are going to be able to hold kandahar and keep the transport routes open? >> there's no guarantee whatsoever. as a matter of fact, there are those among the president's critics who are going to jump on him for sending too few troops and, therefore, guaranteeing failure. there are others who think that we should have no troops there whatsoever. he's going to get a lot of flack from both sides. the strategy is going to be very much different than it was in vietnam or even in iraq. it's going to be to isolate specific areas, some of those that you already mentioned. hold onto them until such time as local militias and the afghan
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army can be trained, but we've been there for a long time and haven't done a very good job. there's no guarantee it's not going to end in failure, too. >> rosemary, do you think there's a danger in trying to train up local forces and get them ultimately to hold the taliban back so the allies can exit, there may be a mistake being made there? naturally it's more about unpalatable deals with tribesmen on the ground. >> i think -- >> no -- >> sorry, rosemary, hollis. forgive me, sir. >> that's okay. >> i think there will be a lot of enthusiasm if president obama says that the main objective is now to train up the afghans. and it would be interesting if there was some indication that working with a broader cross spectrum of afghans was also part of the plan. it may be necessary to leave that for the implementation stage as opposed to the
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announcement stage today. but i think from the standpoint of europe there is a readiness, an urgency about hearing a fairly strong message from the president that he has a plan and that it's not open-ended. that whatever is surged into afghanistan now is part of a broader plan to make the afghans more capable so that there is an end to this operation in sight. >> you raise the subject of europe. why, given the applause that there was when obama took over generally from george w. bush abroad, have the europeans in particular not been better at putting their money where their mouths are? we might get more troops, but it's notable that the french and germans are not full square behind president obama tonight, are they, in committing more troops? >> no, this is true. i think what we're seeing in the last year or so with the
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europeans is they're incredibly intro speck tiff. they were delighted when the americans chose barack obama as their next president. they didn't enjoy the bush administrations in europe at all. when it comes to afghanistan, it was seen from the start after 9/11 as a test for the future of nato, the relevance of nato, but in the meantime the europeans, as i say, while they were pleased about obama's arrival instead of bush are nonetheless very preoccupied with their own internal affairs, the expansion of the european union has been a very unwieldy prospect, the lisbon treaty finally comes into force today, but it was an unspectacular selection, and that tells us that the members of europe are busy pushing their own agendas, not really pulling together with nato or u.s. or indeed the program in afghanistan.
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>> colonel, we don't have time, sadly, to talk about the problems, the rising tensions that there are with iran at the moment, but it is clear that this is a point this time at which president obama potentially has to recast america abroad against this backdrop of having to use a huge amount of political capital on capitol hill with the economy, with cap and trade, with health care. how do you think he should play it? >> well, he's going to -- i can tell you what he's going to do. he's going to play this by focusing attention on the region and the importance of bringing stability to the region and it may come as no surprise that one of the things he's going to mention time and time again is going to be pakistan and how important it is to bring stability to that country because without doing that, it's going to bring guarantee instability in the region. and you're absolutely right about focusing attention on europe, too. there's going to be a pointed exhortation to bring europe back
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into the area to make its contribution to success there. he's going to focus on the region generally and the responsibilities there and is going to suggest that the united states can't do it alone. >> it's been good to talk to you both. i'm afraid we have to leave it there. colonel jack jacobs and rosemary hollis joining us from city university in london. up next on "street signs," get ready to stop trading. jim cramer is around the corner and he's going to tell us what he's picking in terms of stocks and the general move we've had on the markets. good day again today and, of course, you know about gold peaking out as well. plus small screens, touch screens, you name it, they're all flying off the shelves at the big shopping weekend here in america, but do lower prices mean better bottom lines for the companies involved in making them? we'll talk to the ceo of corning up next on "street signs" on cnbc.
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welcome back to "street signs." rick santelli here. well, interest rates are up about six basis points on a ten-year note. you look at the chart, but 326 is not a high yield when last
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year we were flirting with two month low yields. if you look at the next chart, a six-month chart of the dollar/yen. it's down just a smidge today. you can see that's the dollar, where it's gone of late. and you'd have to go back another 13.5 years to find the last time we were down in this zone. and the last chart, after dubai and many say in the markets dismissed it, many don't agree philosophically but here is one chart that bears a little concern out. this is investment grade corporates. has it peaked? this might be something with a credit quality you should pay attention to. >> rick, thank you very much for that. it's time to "stop trading," jim cramer is here. >> good afternoon. wild day. >> what do you think? >> here you have a day where typically you would expect the financials, 14% of the s&p 500,
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to be charging ahead. we just saw underneath rick santelli's picture, obviously the major regional banks and nation banks are not going up. american express is down. what this says to me, we have a broad based rally that does not need the footbainancials. that seems to be like money in. retail throwing money at the market and the big mutual funds choosing to be in every sector but the bank sector. >> i watched the program the other day. they bought in big time because they missed out, can't quite get up -- >> and i also think there's a lot of hedge funds that have one month left. they want to prove why they should be given that big gain, given the fact that a lot of plain old mutual funds are up 30%. so word of crux moment, november now passed, we always thought that november could be a bad month given how much we've had. now we're in december. now we're in december.
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and so there is -- it's kind of an era of good feeling. i have spent five hours today trying to pin down the animal spirits of today. you have natural gas not doing anything, but the natural gas stocks are running. you have a market that is being led again by agriculture. i'm scared of that because that was the seven rally. but there's broad based transports putting in great numbers. these are all signs, simon, of really bullish sentiment except for we don't have those darn banks. but i can give you some individuals i think are exciting. altera. >> can i just ask, would you buy the market here? >> i like -- i got two out of three ain't bad. i got the oils, the semi conductors. i don't have the financials. yes, i would buy the market. i'm focused on retail. i like the fact that altera is able to lead the semis. this is a company that three months ago if they reported a good number, people said don't believe it. instead they're taking it up. i have been following a stock,
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visa. this is really a transaction play. it is soaring here. i'm putting together a thesis which says consumer is better than you think. we have the home sales number today that was very good. we've got what i think is going to end up being a profitable holiday season. and you know what? the money is flowing in here. it's flowing in. >> what does that mean for the new year then? >> well, look, the bears would say we're borrowing from next year. i'm not buying that. >> santa claus rally. >> i think it's the possibility -- i know again this is circular reasoning, so i'm always -- it's got to be suspicious of it, but this is a virtuous circle. we're bringing in a lot of money. let me give you one last ticker. there were many people who put on shorts on friday off of dubai and on wednesday off of dubai. if dubai turned out to be that one off event, they are scrambling furiously to cover because it turned out it was like, wow, why were we short?
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>> wouldn't footbalinancials go that basis? >> how much better is it to admit you're struggle ban that say here is the reason. i don't have the reason but i do have three hours to figure the darn thing out. >> thank you very much. >> thank you. >> jim cramer "mad money" including the ceo of jarden which kicks off at 6:00 eastern. are big screens bad for business? we'll talk to the president and coo of conning whose primary business is making the glass used in lcd computers and tvs and we'll find out what really happens when the consumer cashes in on those holiday price cuts. stay with us on "street signs" on cnbc. sfx:racking of a taillight.
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the consumer electronics association is reporting sales growth up 6% in the holiday period driven mostly by technology. 80% of shoppers surveyed plan on buying technology as gifts this holiday season. 30% saying they would buy a television. we have one company that could benefit from this consumer behavior. corning incorporated. the world's biggest producer of glass use had had d in lcd tele. peter very kindly joins me now. good afternoon. the starting point for the interview has got to be how high your industry set the bar going into the holiday season in terms of inventory and expectations really. >> well, i think you're seeing
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all the same anecdotal information that we are, that this looks like a pretty good season for lcd tvs. factually speaking we have advivizio announcement credit they will be up 40% in the black friday period. our retail data from the week before says set sales are up 34% and large set sales 32-inch and above are up over 50% from the prior year. at this point we're not hearing about any shortages except perhaps in the big door buster category where the prices were really low. >> i mean, of course, you describe in the main the demand situation. it is the supply really i suppose that many of us might be more interested in because there has been this glut of lcds for year and years coming out of asia personified by lg electronics. is there still oversupply. i know it's cut back
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substantially. >> we had a big adjustment this time last year and into the first quarter which took a lot out of the supply chain and ever since then, really since the end of quarter one and the start of quarter two, the industry has been in shortage, and i would say things are running pretty tight right now. i know we are having a difficult time supplying all the glass demand, and we expect -- we're heading into what is normally a slower part of the season, into the first quarter, but we would expect that to be mitigated somewhat. we're not seeing any signs of glut. >> so are you able to push your margins up in that environment? >> remember the glass that is going out in displays right now we sold in quarters two and three, so the way we -- our prices are always seem to go down, not in line with what happens at retail because the glass in the display represents only 8% to 10% of the retail
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price. so we don't participate in those kinds of declines, and we will grow our earnings over time by lowering our cost with higher volumes. that's traditionally what we've done, and that seems to be playing out here as we speak. >> what are you as president doing, what is the strategy to really bring home profitability moving forward? do you rely on the cycle turning over? increased use of 3d technology which may invigorate the whole industry next year or is it as you suggest, a cost phenomenon? >> well, it's both. we are clearly benefiting from rapid demand growth over the past few years. tvs will be up 25% this year. we expect another 20% growth in lcd tvs next year, and that helps us in bringing our costs down to accommodate our customers and the retail customers' need for lower retail
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prices. so this is -- there's a lot about manufacturing here, having capacity in the right place at the right time with the best quality. the other thing that we're doing is we're bringing forth new generations of glass. we just started up our gen ten facility in japan, adjacent to sharp. that glass is ten feet on a side, and it enables the production of six 65-inch tvs at a time up to 28 32-inch displays. >> thank you very much, sir, with the season. that's the ceo of corning. up next on "street signs," pending home sales are up, but it's not all good news. the details when we return on cnbc, first in business worldwide. cnbc first in business worldwide.
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welcome back to "street signs." the deal that we have been talking about all day is done according to sources close to the situation. comcast and ge have fully agreed to a deal under which comcast will take control of nbc universal. one source close to the negotiations told me there is nothing left to process paper. because of that continued processing and one might imagine there is a lot of paper to be signed, the deal will not be announced until thursday morning. we will get the full announcement where comcast will take 51% of nbc universal. ge will drop down. comcast will contribute $6 billion in cash while nbc universal leverages $9 billion in debt.
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those details have not changed. what has, of course, the negotiations between ge and bavindi. that is where the papering is going on. we will get a deal finalizing ge/comcast on thursday morning. now to dine olick. here is your daily realty check. home are up 32% from a year ago the biggest increase ever recorded. defaults on commercial real estate mortgages doubled to 3.4%. it is the highest level in 16 years and the largest quarterly increase ever. on "squawk box" this morning
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they said supply and demand will win out. go to the blog. >> thank you very much, diana. let's stay with housing. the ceo of mortgage master, one of the largest lenders in the united states. we heard diana with the figures and almost every day we have figures thrown at us. how does it feel to you and your employees on the ground, the housing market? >> the year over year number has to be compared to the worst month ever after lehman's collapse last year. the monthly numbers continue to be better. the big question in our industry, of course, what happens april 30th when the tax credit runs out for first-time home buyers? is that going change it? we don't know. right now rates are good, prices are good, everything is good
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except underwriting guidelines. it is difficult for people getting a loan today. >> are you suggesting when we see these good figures of intentions to buy, some of those are going to fall through? >> well, you know, yeah. not every loan that is started will close. we know that in the industry. the pressure from the agencies, fannie, freddie, to by back loans gets pushed down to our level so everybody is running scared these days what is the next wave of loans that will be bought back. because of that appraisal guidelines and underwriting guidelines are tougher than i have ever seen them in 25 years. >> sadly, we have to leave it there. thanks for joining us. that for today is "street signs." "closing bell" continues after the break.
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because we believe in the strength of american businesses. ge capital understands what small businesses need to grow and create jobs. today, over 300,000 businesses rely on ge capital for the critical financing they need to help get our economy back on track. the american renewal is happening. right now. this is onstar reporting a stolen blue chevy tahoe, south on i-75, near exit 5. we're on it. onstar, we may have that tahoe.
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